Only words matter? The effects of cognitive abilities on commercial insurance participation

Tingting Zhang, Wenquan Li, Kaixin Li, Zhifeng Liu

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

We examine the relationship between cognitive abilities and commercial insurance participation. Using data from the Chinese Family Panel Study, we find that average cognitive ability has a significantly positive impact on commercial insurance participation. However, this influence comes mainly from literacy ability, indicating that the literal meaning of the words plays a major role. Additionally, trust level can also affect the impacts of cognitive abilities on commercial insurance participation. Specifically, residents with lower trust levels are less likely to use their cognitive abilities to process information and make commercial insurance purchasing decisions. Moreover, we identify the supplementary effect of economic and managerial knowledge on cognitive abilities.

Original languageEnglish
Article number101691
JournalNorth American Journal of Economics and Finance
Volume61
DOIs
Publication statusPublished - Jul 2022
Externally publishedYes

Keywords

  • Cognitive ability
  • Information
  • Insurance participation
  • Trust

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